BREAKINGVIEWS-Toying with TikTok courts a Big Tech revolt

By Jennifer Saba

NEW YORK, June 26 (Reuters Breakingviews) - TikTok’s twisted timetable tempts trouble. Donald Trump has again extended a deadline for China’s ByteDance to sell its popular video app or face a ban. In doing so, the U.S. commander-in-chief is ignoring a congressionally passed, presidentially signed and Supreme Court-authorized decision. Brazenly flouting the law creates myriad consequences, among them giving Meta Platforms META.O and Alphabet GOOGL.O an excuse to defy any potentially ordered breakup.

The showdown stretches back to Trump’s first Oval Office stint. In August 2020, he declared TikTok a national security threat, imposing sanctions designed to cripple it. As software developer Oracle ORCL.N and other suitors circled, the social media service fought back. Four years later, a divided Capitol Hill approved legislation calling for ByteDance to sell the U.S.-based assets, including its algorithmic special sauce, or shut them down. President Joe Biden signed the bill into law and the highest court in the land later backed it unanimously.

By then, however, Trump had changed his tune on TikTok. He signed an executive order last week giving ByteDance, valued privately by some of its backers at $400 billion recently, a third reprieve and another 90 days to find a buyer while instructing the Justice Department not to prosecute the matter. The legal ambiguity is risky for Apple and Alphabet, both of which could be liable for letting users download the app. Such doubts also threaten to complicate any attempts to crack down on Silicon Valley titans.

For instance, the Federal Trade Commission has sued Meta for monopolistic behavior, including its 2012 acquisition of Instagram. Facebook’s owner is arguing that TikTok, with some 170 million U.S. users is one of its biggest rivals, broadening the generally accepted market definition. At the very least, trustbusters will have a weaker hand enforcing a split, if courts order one, when the administration refuses to follow the law as it applies to a competitor with a foreign parent.

Alphabet and Amazon.com AMZN.O confront similar regulatory challenges that could lead to adjudicated divestitures. Apple AAPL.O, meanwhile, may already be taking a cue from Trump. A judge earlier this month scolded the iPhone maker for disregarding instructions to make it easier for app designers like Epic’s Fortnite to steer users to non-Apple payment methods.

There’s nothing clearcut to prevent Meta boss Mark Zuckerberg or Amazon’s Jeff Bezos from bypassing judges to strike side deals with Trump. In fact, additional curiosities keep pushing boundaries. The FTC, for example, approved an advertising mega-deal this week after Omnicom OMC.N and Interpublic IPG.N agreed not to advise clients on where to spend based on political or ideological grounds. The longer the clock runs for TikTok, the bigger a timebomb it becomes.

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CONTEXT NEWS

President Donald Trump issued an executive order on June 19 extending a deadline for China-based ByteDance to sell its popular U.S. app TikTok until September 17. The directive instructs the Department of Justice to not enforce the Protecting Americans from Foreign Adversary Controlled Applications Act.

The bill, which orders ByteDance to sell TikTok, including its algorithm, or face a potential ban, was passed by Congress in 2024 and signed into law by former President Joe Biden. The Supreme Court upheld the legislation in January.